US regional operator SkyWest Inc. has agreed to loan partner United Airlines $80 million, while at the same time preserving existing business and brokering a new agreement for its Atlantic Southeast Airlines (ASA) subsidiary.
The loan is secured by certain ground equipment and airport slots held by United. Additionally, SkyWest has agreed to defer $49 million in payments from United, with an 8% deferral fee payable weekly.
In return United has agreed to extend SkyWest's existing rights to operate 40 regional jets in the United Express network until the end of their current lease terms, which is an average of 8.4 years.
ASA, who until now has only operated regional feed for Delta Air Lines, plans to start United Express operations in the first quarter of 2010, and intends to operate 13 aircraft by May of next year. The agreement between ASA and United has a five year term.
SkyWest CFO Bradford Rich says the agreements are an "opportunity to utilize the strengths of both companies to create value for both of us".